Facebook's new status? It's complicated

FILE - This Dec. 13, 2011 file photo shows a sign at Facebook headquarters in Menlo Park, Calif. Facebook, the social network that changed "friend" from a noun to a verb, is expected to file as early as Wednesday, Feb. 1, 2012, to sell stock on the open market. Its debut is likely to be the most talked-about initial public offering since Google in 2004. (AP Photo/Paul Sakuma, file)
— AP

FILE - This Dec. 13, 2011 file photo shows a sign at Facebook headquarters in Menlo Park, Calif. Facebook, the social network that changed "friend" from a noun to a verb, is expected to file as early as Wednesday, Feb. 1, 2012, to sell stock on the open market. Its debut is likely to be the most talked-about initial public offering since Google in 2004. (AP Photo/Paul Sakuma, file)
/ AP

Last year, Facebook got about $3.2 billion in advertising revenue, which accounted for 85 percent of its total. The rest came from what it calls "payments and other fees," namely the app payments. Zynga alone accounted for 12 percent of Facebook's revenue in 2011.

Analyst Debra Aho Williamson offered one reason that Facebook's revenue is lower than she expected: its focus on the user experience. The company, she said, has been "very deliberate" about how it displays ads. There are no splashy banners plastered across users' home pages and no intrusive video ads popping up left and right.

For all of Facebook's success, the company has had its troubles. It has gone through a series of privacy missteps over the years as it has pushed users to disclose more and more information about themselves. Most recently, the company settled with the U.S. Federal Trade Commission over allegations that it exposed details about people's private lives without getting legally required consent. And the legal fights over Facebook's origins have been embarrassing and sometimes distracting, though Zuckerberg has consistently denied allegations that have depicted him as ruthless.

Zuckerberg has made it clear he isn't especially keen on leading a public company. He has said many times that he prefers to focus on developing Facebook's products and growing the site's user base, rather than trying to hit quarterly earnings targets in an effort to keep investors happy.

In a letter included in Wednesday's filing, Zuckerberg paints a rosy, idealistic picture of Facebook.

"Facebook aspires to build the services that give people the power to share and help them once again transform many of our core institutions and industries," he wrote.

Zuckerberg also pledged to stay true to Facebook's scrappy roots even on the road to becoming a multinational corporation.

"The word `hacker' has an unfairly negative connotation from being portrayed in the media as people who break into computers," he wrote. "In reality, hacking just means building something quickly or testing the boundaries of what can be done."

Lately, Zuckerberg has matured into the role, said Scott Kessler, a Standard & Poor's equity analyst who follows Internet stocks.

"Clearly he is a very smart and shrewd person," he said.

Zuckerberg has surrounded himself with other savvy executives, who are often more experienced. They include Chief Operating Officer Sheryl Sandberg, who helped build Google's advertising business before Facebook lured her in 2008. Facebook's finance chief is David Ebersman, a former executive at biotech firm Genentech.

Amid the buoyant optimism about Facebook's prospects as a public company, some analysts see troubling parallels to the dot-com boom of the late 1990s, which turned into a devastating bust in the early 2000s. The biggest fear is that some investors will become so enamored with Facebook's brand and brawn that they will try to buy the Facebook shares the day the company goes public with little financial analysis or recognition of the risks.

"It's a one-day circus," said John Fitzgibbon, founder of IPOscoop.com.

The IPOs of Zynga and LinkedIn showed that success isn't guaranteed even for profitable companies with huge followings. Zynga's stock is currently trading just slightly above its IPO price. LinkedIn closed at $72.37 Wednesday, far below the $122.70 record that it hit on its first trading day.

Morgan Stanley is the lead banker for the IPO. The other banks involved are JPMorgan, Goldman Sachs, BofA Merrill Lynch, Barclays and Allen & Co.